The Caribbean’s Troubled Ties to Washington

Tourism

The process to obtain a passport entails waiting at least 12 weeks and paying a fee of $97 for each adult and $87 for each child. With the Western Hemisphere Travel Initiative (WHTI) pass stipulation going into effect on January 23, 2007, many vacationers were hindered by these expensive add-ons and time-consuming processes and, therefore, often have had to cancel trips to some Latin American destination spots at the last moment. Some argue that the effects of the new passport laws create a short-term encumbrance on tourism, something which is already being seen. Others maintain that there are more important factors contributing to the decline of tourist flows; other experts insist that soon enough, particularly to the Caribbean Basin, business will be back in full force. However, some dissenters maintain that the Caribbean’s luck with American tourists may have run dry. Now that federal law requires that Americans, who make up 60 percent of the tourists heading for the Caribbean, must carry a passport when flying across any U.S. border, the number of U.S. citizens who have the vital documents will continue to grow, as will their ability and desire to reach out to more exotic locations. Like the Chief Executive of the Caribbean Hotel Association, Alec Sanguinetti, has said, “Once an American has now got a passport, the world is their market. They can go anywhere.”

Goodbye, Easy Travel

For years, the sandy white beaches and everything else in the Caribbean have made it an irresistible destination for American tourists. It was an easy, relaxing getaway, especially considering that the only necessary travel documents were either a driver license or birth certificate. In the last year, however, the number of American travelers to the Caribbean has declined by 12 percent. In fact, prices that were already being discounted for off-peak travel periods are being further reduced. The period of late summer and fall are averaging 10 percent less than the same time period in 2006, as noted by CheapCaribbean.com’s Jim Hobbs. According to the World Tourism Organization, the Caribbean is the only sub-region to experience a decline in tourists during the first four months of 2007; all other regionshave recorded an upsurge in tourism. On January 23, 2007, the travel requirements were altered by the new WHTI mandate that all international, air travelers need a passport, a document that an estimated 79 percent of Americans do not hold. This created alarm in the Caribbean nations because it further disrupted what was already a volatile tourist industry, a lucrative enterprise upon which the region remains heavily dependent.

The new law requires all citizens of the U.S., Canada, Mexico and Bermuda to have a passport or other acceptable documents which establish the person’s identity and nationality to enter and re-enter the U.S. from within the Western Hemisphere. Other acceptable documents include a Border Crossing Card (a card that serves the same purpose as a passport and a visa for Mexicans traveling to the U.S.), Customs and Border Protection Secure Electronic Network for Travelers Rapid Inspection (SENTRI), NEXUS and Free and Secure Trade (FAST) program cards. The change came about from a suggestion made by the 9/11 Committee, which Congress proceeded to enact into law by the Intelligence Reform and Terrorism Prevention Act of 2004. It was hoped that the enactment of the passport requirement will cut down on the many different documents that Customs and Border Protection must now check, which in turn is expected to increase border security. “Our goal is to strengthen border security and expedite entry into the United States for U.S. citizens and legitimate foreign visitors,” Secretary for Border and Transportation Security, Randy Beardsworth stated. “By ensuring that travelers possess secure documents, such as the passport, Homeland Security will be able to conduct more effective and efficient interviews at our borders.” It was, however, realized that this would affect tourism within the region of the Caribbean. Asa Hutchinson, under secretary for Borders and Transportation in the U.S. Department of Homeland Security, noted that the price for protecting the U.S. against terrorism would be the “challenge to maintaining commerce, tourism, and friendship between our neighbors” in the South. In January 2008, the regulations intent on protecting U.S. citizens will stretch even further, across land and sea travel.

Caribbean’s Dependence on Tourism

Tourism is the biggest industry in the world, and its continued vitality may be even more crucial to Caribbean nations. In a COHA interview, the Secretary General of the Caribbean Tourism Organization (CTO), which represents 32 nations in the region, Vincent Vanderpool-Wallace, said that, “Tourism is the one area in which we have a clear, natural, global comparative advantage.” Foreigners visit the region to enjoy the tropical paradise, but also in hopes of immersing themselves into the culture and tradition of the islands, bringing a celebration of the indigenous peoples. This in turn provides jobs to citizens of those countries, whether it be as a resort staffer or someone that crafts souvenirs. These jobs have provided a large portion of the Caribbean’s employment for several decades. For example, in the most popular destination, Jamaica, 67.5 percent of the 1.1 million people in the country’s labor force are directly or indirectly engaged in the tourism industry. If tourism in the Caribbean crashes, the unemployment rate in all of these destinations will skyrocket and cause huge problems for what are basically already underdeveloped nations.

Caribbean countries take a grave risk to have an economy so monofactorial based on the tourism industry. In the event of a natural disaster, such as the currently devastating Hurricane Dean, tourism arrangements normally precipitate a generalized decline throughout the entire industry as would-be vacationers quickly cancel their reservations and divert their immediate plans. Destinations such as Cancun have just recently finished rebuilding their resorts and beaches after Category 5 Hurricane Wilma ravaged their shores. Not only natural disasters, but also global events such as the September 11, 2001 terrorist attacks, can cause a major drop in revenues to the tourist industries. According to the International Trade Administration, “U.S. travel and tourism exports decreased 13 percent in 2001, the largest decline on record.” While it is true that the industry witnessed growth again by the end of 2003, it was not until 2005 that it had fully recovered.

A similar case exists with Washington’s new passport regulations. Vanderpool-Wallace confirmed that, “as far as we can see, business from the United States was growing steadily before the introduction of WHTI. Now the situation has been abruptly reversed.” He reported that an estimated loss of more than $400 million to the Caribbean economy already has occurred in the first four months of 2007 and that these losses have the potential of significant accelerations.

A Plea for Leniency
When the passport regulations were first announced, the 2006 president of the Bahamas Hotel Association lamented that the “action demonstrates an incredible insensitivity to our economies.” The WHTI requirement, which mandates that all U.S. citizens have a passport when traveling abroad, was delayed by the U.S. Department of Homeland Security and the Department of State because of the backlog that occurred in the issuing of passports. Instead of having an actual passport, it is lawful for travelers to provide proof of a passport application until September 2007. However, many close to the industry, such as the current Bahamas Hotel Association President Russell Miller, have voiced their concern over the date on which it is absolutely necessary to have a passport, and have appealed to push the deadline back further. “Today it is taking 12 or more weeks to process applications. We believe the flexibility ruling put in place in June, which allows for [US citizens to] travel upon proof of application, along with two forms of identification, needs to be extended well beyond the stipulated September expiration date,” Miller said. Vanderpool-Wallace told COHA that his organization “will comment before the deadline to request a further extension of the dates for the full implementation of WHTI and that [they] are encouraging all of [their] members to do so.”

According to Travel Daily News, the U.S. Senate Appropriations Committee has recognized the severe consequence that the passport delay is having on the economies of many countries. They therefore voted on June 17 to further delay passport requirements for U.S. travelers entering the country by land or sea from Canada and Mexico by 18 months, to June 1, 2009, as a result of the enormous build up of delays in issuing passports.

An Increase in Advertising

With the U.S. market for tourism in decline, Caribbean travel officials are aggressively pursuing other prospective tourist consumers coming from non-traditional, or previously underserved markets. The Canadian and European markets have become prime targets for advertising the allure of the tropics. While Americans up to now have comprised a major portion of the tourists coming to the Caribbean, Europeans and Canadians have closely followed. However, Vanderpool-Wallace noted in the interview that, “even though we will go after other markets including Canada and Europe more vigorously, we will become even more aggressive in the nearer U.S. markets.”

Regardless of WHTI, the question remains whether or not the American public has simply grown tired of the Caribbean and are now of the mind to experience other parts of the world. Evidence that this could be happening is illustrated by the nine percent drop in U.S. tourists to Puerto Rico and a seven percent decline in tourism to the U.S. Virgin Islands, two territories not affected by the WHTI. Vanderpool-Wallace argues that, “An American can grow tired of the Caribbean only because we have failed to present the full Caribbean.” He believes that there is more to the region than beaches and sun. Fortunately, with the region’s growing use of the internet, it will become increasingly easier to advertise within the U.S market and present the full spectrum of the Caribbean to the public in a much more effective and economical way. According to the CTO official, “this way will be the most powerful tool in overcoming the clear and negative effects of WHTI.”

One way to advertise is through large events, such as the recent 2007 Cricket World Cup, in which many of the Caribbean nations hosted games. Paxton Baker, the Executive Vice President of BET Digital Networks, claimed that the events business can generate major revenues and attract tourists to the Caribbean, and that the region should focus on hosting such world class occurrences. While the 2007 Cricket World Cup did not show overwhelming success for the economies of the host countries, Olga Kalinina, an economic analyst at Standard & Poor’s, believes that, “in the future, the success of the Cricket World Cup will be judged by the extent the islands will be able to capitalize on the additional visitors who came for the World Cup but may return as tourists going forward.”

High Hopes in the Caribbean
Organizations like CTO, resort managers and the average Caribbean islanders can only hope that the WHTI regulations have an effect similar to that of a hurricane: short-term devastation that is soon succeeded by gentle breezes. This year has shown a definite decrease in U.S. tourists to the Caribbean and if the decline continues, the region will have to face increasingly hard times. With tourism as one of the main industries in the Caribbean, the loss of U.S. tourists, the region’s wealthiest neighbors, can only be lethal. Vanderpool-Wallace explained that, “we were hoping to grow tourism to reduce the debt burden of many of our countries that have some of the highest ratios of debt to GDP in the world. With the kind of losses that we now see, some of those plans will be slowed considerably.”